Pay increases during Glendale's wage freeze

It's a common refrain at City Hall: Employee raises have been frozen since 2009 due to austere budget conditions.

But that doesn't necessarily mean city employees haven't been making more money.

In 2012, roughly three-quarters of the top 45 salary-earners made more than they did the year before, even though the vast majority did not receive promotions, city records show.

The employee who had the greatest pay increase without a promotion made $33,303 more in 2012 than the year prior.

The difference in pay comes, in general, from a variety of factors, including overtime and guaranteed annual boosts known as "step increases." Promotions also played a role for those that took on higher-ranking jobs.

Of the $15.4-million budget gap the city closed last year, $1.4 million was attributed to step increases.

Forward-looking public agencies are weighing the cost of these guaranteed benefits that have been in place for decades, but may not be the best fit for modern times, said City Manager Scott Ochoa.

"Before, no one really wanted to look out and have that discussion. Maybe now is the exact opportune time," Ochoa said. "The old way of thinking is completely gone."

But forging a new civil compensation system will be a rough road, said Larry Rosenthal, a Chapman University law professor with expertise in local government law.

"Like almost everything in public policy, it's complicated," Rosenthal said.

Most of the top 45 earners last year were fire and police officials who benefited from overtime as they filled in for sick workers or aided other agencies that needed help.

When Hurricane Sandy struck the East Coast, several Glendale firefighters went to New Jersey, but overtime pay for mutual aid work is reimbursed by state and federal funds, said city spokesman Tom Lorenz.

In addition to freezing across-the-board raises, Glendale stopped doling out merit-based bonuses in 2009. The year before, the bonuses — dispersed to about 40 employees — cost the city about $228,400, according to city documents.

Firefighters are set to get a 2.5% across-the-board wage increase next fiscal year — although that's less than the 4.5% boost that had originally been scheduled after an agreement was reached with City Hall.

Step increases, on the other hand, aren't considered one-time bonuses or promotions. Instead, they're permanent pay raises that are triggered — so long as an employee gets a satisfactory evaluation — every year until the employee reaches the highest step.

It takes almost nine years for a rank-and-file employee to get to that final step.

That's what happened to Asst. City Manager Yasmin Beers last year, whose salary jumped by $18,067 to $192,301 in 2012 as she took a step up in pay and received more compensation for roughly six weeks while acting as the interim city manager.

City Atty. Mike Garcia and Director of Community Development Hassan Haghani also took steps up, Lorenz said. Their gross salaries last year grew by $17,991 to $227,995 and by $9,289 to $194,965, respectively.

Overhauling the compensation system in Glendale may spark heated negotiations with unions and perhaps even public backlash, Ochoa said.

"The public has a distaste for anything else," he said.

The fairest way is to align public salaries with similar jobs in the private sector, but that can be like comparing apples and oranges when defined pensions or unique jobs, such as firefighters, are factored in, Rosenthal said.

And the current system in Glendale — guaranteed step increases with no cost-of-living raises — benefits older employees and makes government work less attractive to newcomers, Rosenthal said.

"What you really need is a real and effective system of accountability," he said.

City officials say step increases aren't automatic because employees have to perform satisfactorily to get them, but former Neighborhood Services Administrator Sam Engel — who ran unsuccessfully for City Council last month — said on the campaign trail that he had given positive reviews to employees who didn't deserve them because of pressure from higher-ups.

That kind of situation, and the protracted recession, have fueled a negative public perception of city compensation rates.

"The public perception of public-sector wages is never generous in good times, but in hard economic times, it's even worse," said Jaime Regalado, a political analyst.

City officials have reduced some pay rates, such as cutting the salary for a vacant Glendale Water & Power customer service manager by 22% last week. But, some have also been adjusted upward after nearly 150 employees left City Hall because of early retirements and layoffs last year.

At the same time, the city has ratcheted up how much employees pay toward their own retirements in recent years to between 8.5% and 12.5% of their paychecks. That may have to increase again in coming years due to a rate hike imposed by the California Public Employees' Retirement System, or CalPERS.

"These are tough times," Councilwoman Laura Friedman said, adding that officials have to be fair to both employees and taxpayers, all while dealing with the added pressure of competing for top employees.

"We are competing in a marketplace," she said. "You want to have the best employees you can get."